"SpaceX is buying EchoStar's AWS-4 and H-block spectrum licenses designated for satellite and mobile communications according to a statement Monday, confirming an earlier Bloomberg News report. It will pay as much as $8.5 billion in cash and up to $8.5 billion in SpaceX stock. SpaceX has also agreed to fund a total of about $2 billion in cash interest payments on EchoStar debt through November 2027."
"Shares of EchoStar rose as much as 26% on Monday in New York to a record high of $84.48. Its bonds were the biggest gainers in the junk-bond market, according to Trace pricing data. The AWS-4 sale transfers another crown jewel of EchoStar's spectrum portfolio, effectively ending hopes that it would become a fourth major wireless carrier as stipulated by regulators as part of the approval of the T-Mobile and Sprint merger."
"The sale, which follows a recent sale of other spectrum rights to AT&T Inc. for about $23 billion, should resolve inquiries from the US Federal Communications Commission, according to the statement. The FCC accused EchoStar in May of not effectively using the spectrum it was awarded and threatened to strip some of its valuable licenses, tipping off a series of frenzied dealmaking as EchoStar skipped bond payments and considered filing for bankruptcy."
SpaceX agreed to acquire EchoStar's AWS-4 and H-block spectrum licenses for about $17 billion, using up to $8.5 billion cash and up to $8.5 billion in SpaceX stock. SpaceX will also fund roughly $2 billion in cash interest payments on EchoStar debt through November 2027. EchoStar shares jumped and its bonds rallied after the deal. The sale follows a separate transfer of spectrum rights to AT&T for about $23 billion and should address FCC inquiries that accused EchoStar of not effectively using awarded spectrum and threatened license stripping, amid missed bond payments and bankruptcy considerations.
Read at www.mercurynews.com
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